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Mortgage Modification Requirements:
 
#1 Hardship
A mortgage modification or a loan modification requires a hardship. People who experience a hardship often end up in foreclosure trouble. Loan modifications are designed to help these people restructure mortgages to fit their current financial situation. A hardship is the loss of income or increase in expenses. Layoffs, closings, loss of hours, adjustable loan terms, all can create a hardship for homeowners.  A hardship is the first requirement for a modification. If you have a change in your financial situation causing your budget to fail you may have a hardship.


#2 Negative income to expenses
 
A homeowner expenses must exceed their income to qualify. If you can make all of your current payments and still have income you will not qualify. Expenses exceeding income creates a negative budget every month. This is the problem a modification must correct.
#3 The modification must balance the budget.
 
A homeowners buget must balance after the mortgage modification for there to be an approvable restructuring. The lender must be able to justify the terms of the modification for it to make sense. If your income can support the new payment and the new payment balances the budget it is possible to modify the mortgage.